Source · Select Committees · Public Accounts Committee
Recommendation 19
19
The Department told us that in order to get money to where it thought it...
Conclusion
The Department told us that in order to get money to where it thought it was needed during the COVID-19 pandemic it deliberately loosened controls and thereby took on a lot of additional risk spending money without prior approval.35 It acknowledged that its controls and processes were inadequate for the post-pandemic environment and need to be reset. We questioned the Department on what changes it had made to its processes so that this does not happen again. The Department told us that it had launched a financial reset programme to get it and the NHS back to normal financial management. It said this programme would review systems and processes; capabilities and capacity; governance and accountability arrangements. It said “very strict processes” had been reintroduced to ensure approval was received before public money had been committed.36 However, its pre-pandemic processes failed to prevent unauthorised spending. In 2019–20 the value of unapproved special payments across the Departmental Group was estimated as £18 million.37
Government Response
Not Addressed
HM Government
Not Addressed
4: PAC conclusion: The Department has regularly failed to follow public spending rules and across the Departmental Group there is a track record of failing to comply with the requirements of Managing Public Money. 4: PAC recommendation: The Department should write to us by October 2022 setting out the systems and processes it has established as part of its ‘financial reset’ to ensure the regularity of expenditure and compliance with spending controls across the Departmental Group going forward. 4.1 The government agrees with the Committee’s recommendation. Target implementation date: October 2022 4.2 The department is undertaking a finance reset programme, which is establishing robust financial controls and governance across the department and its arms’ length bodies (ALBs). The department is making good progress in this area, with the programme of activity continuing through to the end of this calendar year. 4.3 The programme has put in place a proportionate, risk-based financial control framework that ensures that areas of spend subject to external controls (for example, by HM Treasury and Cabinet Office) are reviewed and approved as required by Managing Public Money. Internal delegations ensure that spending proposals below those subject to external controls are also subject to appropriate review and approval and maximise value for money. 4.4 To date, the department has: • implemented updated financial delegations across the department and its ALBs, taking account of internal and external controls; • developed a training programme which will be mandatory for all senior civil servants, aimed at increasing their awareness and understanding of their roles as budget holders; and • re-developed internal business case guidance, to improve the quality of business cases going forward. The department will provide a further update to the Committee by October 2022.